LE­GAL MAT­TERS

Man­u­fac­tur­ing De­fect

Consumer Voice - - Contents - Dr Prem Lata,Con­sumerAwak­en­ing Mem­ber,CDRF-Delhi

Only Parts May Be Changed, Not the Ve­hi­cle

Many a times, the dealer–buyer con­flicts have reached con­sumer fo­rums, and thank­fully so. These have re­sulted in the pen­ning of land­mark judge­ments that favour con­sumers and legally em­power their rights. The Real Case

“It is shame­ful that de­fec­tive car was sought to be sold as brand new car, it is fur­ther re­gret­table that

Any sane per­son with an eye for lit­tle de­tails can spot the dif­fer­ence be­tween ‘used’ and ‘brand new’. And the dif­fer­ence be­comes more ob­vi­ous when an ef­fort is made to make the old look like new. In case of ve­hi­cles, es­pe­cially cars, the dif­fer­ence be­tween the new and the old can be eas­ily found, es­pe­cially if the old car was dam­aged and re­paired, and its dents mended and re­painted. So, what hap­pens when car deal­ers at­tempt to pass on a used, re­paired and dented-painted ve­hi­cle as a new one to in­no­cent buy­ers? Also, what about cases where the com­plaints of car own­ers turned out to be un­jus­ti­fied?

in­stead of ac­knowl­edg­ing the de­fect, com­pany has cho­sen to deny and go in ap­peal,” said the Supreme Court (SC) while an­nounc­ing its ver­dict in the case of Jose Philip Mampillil ver­sus Pre­mier Au­to­mo­biles Ltd in Jan­uary 2004.

This case be­gan at the district con­sumer fo­rum. The com­plainant had bought a Pre­mier 1.38 diesel car (NE 118), man­u­fac­tured by Pre­mier Au­to­mo­bile. At the time of de­liv­ery of the car, the com­plainant found

de­fects in the paint. The dealer promised to rec­tify the same within a few days. How­ever, the de­fects could not be al­tered and the com­plainant re­fused to ac­cept the de­liv­ery of the car. Even­tu­ally, the dealer per­suaded him to take the car, as­sur­ing all de­fects would be fixed later. The equa­tion be­tween the par­ties be­came worse when the com­plainant found out that the pis­ton rings of the en­gine were de­fec­tive as well and there was ma­jor leak­age of en­gine oil. There­after, the car was re­peat­edly sent to the dealer for re­pairs, but the de­fects could never be re­paired.

Af­ter thor­ough hear­ing, the district fo­rum or­dered for re­pair of paint and parts and re­place­ment of the en­gine. The fo­rum also or­dered for com­pen­sa­tion of Rs 40,000.

Nearly 10 Years Later

The le­gal bind­ings of dealer, man­u­fac­turer and buyer re­la­tion­ships got fur­ther clar­ity in Fe­bru­ary 2014 when Na­tional Con­sumer Dis­putes Re­dres­sal Com­mis­sion pro­nounced an or­der in the mat­ter of Tata Mo­tors Ltd and oth­ers ver­sus Dr Anuj Paul Mainiand oth­ers.

In this case, the com­plainant had pur­chased a Tata In­digo Ma­rina Dic­tor and even be­fore in­voice could be is­sued, he found that the ve­hi­cle had eight de­fects that had to be fixed by the man­u­fac­turer.

The mat­ter went to the Supreme Court, where the dealer pleaded that as per the war­ranty clause he was only li­able to carry out re­pairs and those were al­ready done. The dealer fur­ther in­sisted that the com­pen­sa­tion should be paid by the man­u­fac­turer.

In the fi­nal stage of hear­ing, SC agreed that the pis­ton rings and diesel en­gine de­vel­oped de­fects af­ter the sale and were not a man­u­fac­tur­ing de­fect. The court also ob­served that the dealer had sold the ve­hi­cle even af­ter hav­ing full knowl­edge of the man­u­fac­tur­ing de­fects it had. Hence, the court held both– the dealer and the man­u­fac­turer – equally li­able for the cost of re­pairs as well as com­pen­sa­tion.

It is per­ti­nent to men­tion here the In­dian Oil Cor­po­ra­tion ver­sus Con­sumer Pro­tec­tion Coun­cil Ker­ala case of 2004. The SC had made it clear then that the re­la­tion­ship be­tween dealer and man­u­fac­turer was one of prin­ci­pal to prin­ci­pal and not of prin­ci­pal and agent. Hence, both are li­able for their own wrongs.

How It Hap­pened

In or­der to avoid crush­ing a dead an­i­mal on the road, the driver took a steep left turn, but the steer­ing got stuck. The car landed in a deep trench and was se­verely dam­aged. The com­plainant al­leged be­fore the con­sumer fo­rum that man­u­fac­tur­ing de­fect had caused the ac­ci­dent and ob­tained an or­der for re­place­ment of the car with com­pen­sa­tion. The State Com­mis­sion, how­ever, re­versed the re­place­ment or­der, but asked the man­u­fac­turer to pay three lakh ru­pees for re­pairs along with Rs 2,000 as the cost of lit­i­ga­tion.

The com­plainant moved the Na­tional Com­mis­sion seek­ing re­place­ment of the ve­hi­cle or its whole body. Here, the com­mis­sion held that the car went to the work­shop as many as 11 times and that the de­fect was ad­mit­ted right in the be­gin­ning even be­fore is­sue of in­voice. Hence, it amounted to man­u­fac­tur­ing de­fect and it was pre­sumed that the same de­fect had caused the ac­ci­dent. The court held that there was ab­so­lutely no need to take ex­pert opin­ion at that stage.

At the same time, the court held that if the en­tire cost of re­pair was paid and the ve­hi­cle ran well, there would be no need to re­place the whole body. It held that a car ran with as­sem­bled parts that could be ei­ther re­paired or re­placed. Thus, the Na­tional Com­mis­sion re­tained the or­der passed by the State Com­mis­sion, but in­creased the cost of lit­i­ga­tion from Rs 2,000 to Rs 10,000.

Rel­e­vant Judge­ments

Dur­ing the hear­ings of the above-dis­cussed case, a num­ber of judge­ments were taken into con­sid­er­a­tion. Some of these are men­tioned be­low. • Maruti Udyog Ltd ver­sus Susheel Ku­mar Gab­go­tra: Supreme Court held that where de­fects in var­i­ous parts of a car were es­tab­lished, di­rec­tion for re­place­ment of the car would not be jus­ti­fied. Re­place­ment of the en­tire item or re­place­ment of de­fec­tive parts only was called for. • Suren­dra Ku­mar Jain ver­sus RC Bhar­gava & oth­ers: This was the es­ca­la­tion of a case from the State Com­mis­sion by a com­plainant who was ask­ing for re­place­ment of the car. He had ap­pealed that the car de­vel­oped prob­lems from the very be­gin­ning. These were at­tended to from time to time, but he had not pur­chased a car for tak­ing it to the work­shop with such reg­u­lar­ity – on al­most 11 oc­ca­sions within a year. The State Com­mis­sion had al­ready awarded Rs 25,000 as com­pen­sa­tion and Rs 2,500 as costs. Af­ter thor­ough in­ves­ti­ga­tion of the case, the Na­tional Com­mis­sion held that ‘ the only ma­jor fault found in the car was a leak­ing ra­di­a­tor, which was nor­mal con­sid­er­ing the age of the ra­di­a­tor. The ra­di­a­tor was re­placed as re­quested by the com­plainant. At this stage, we do not wish to get into the con­tro­versy of whether the ra­di­a­tor was re­paired or re­placed. The fact re­mains that ve­hi­cle is on road, and is run­ning, and since the State Com­mis­sion has al­ready com­pen­sated the com­plainant for the in­con­ve­nience caused to the com­plainant dur­ing the war­ranty pe­riod for hav­ing taken the ve­hi­cle on dif­fer­ent oc­ca­sions, we see no ground to in­ter­fere with the well-rea­soned or­der passed by the State Com­mis­sion. In the afore­men­tioned cir­cum­stances, we see no merit in this ap­peal, hence dis­missed.’

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